Saving Money/Saving for a Mortgage TipsJuly 18, 2016
Continuing on my tips and tricks posts that you've all been loving so much recently, and today I thought i'd go into the more serious grown up topic of saving money. I'm currently in the midst of trying to save ultimately to get myself on the property ladder, of which i've received a lot of advice on and the best ways in which to save, so I thought i'd pass on some of the knowledge and tips i've been given.
Since starting my first proper full time job with a salary, I swore to myself that I would get serious with saving as i've saved here and there over the years but i've never really set myself goals or reason in which to save for. Being 22, almost 23 years old i'm definitely at that age where I want to move out and just gain some independence, but i've never been one to want to rent. I just think it is dead money, and I would never judge anyone for renting, as it is a great way to gain independence and some people don't really have a choice but to rent but personally it is not for me.
So my only option really is to save my ass off for a deposit for a house, and although i'm not on a big enough salary to have a mortgage big enough at this present, I wanted to at least begin saving so i've actually got something to show in a few years time rather than dwindling money down the drain. So after than somewhat long ramble, here are a few tips on saving money and ways in which you can save money.
Help to buy ISAs - Ever since I was young, the word ISA was something that I knew as a savings account but having never really thought about my savings before i've never had an ISA. When I first voiced my interest in starting to save for a mortgage my parents introduced me to the idea of a Help To Buy ISA, which is something that is relatively new but great if you're a first time buyer like me. The best thing about a Help To Buy ISA is that you save an amount of £200 per month, no more and no less and for every £200 you save the government will give you an extra £50 on top of that, with a maximum government bonus of £3,00 which I think is bloody amazing! The best thing about this type of ISA is that you can still take money out, especially in the case of an emergency but you then can't just pay that money back in so it gives you more of an incentive to not touch it. You can read more about Help To Buy ISAs here, especially if you want to find out more info but if you're a first time buyer i'd definitely recommend getting yourself a Help To Buy ISA.
Having another savings account - Now if you do have a Help To Buy ISA, legally you are not allowed to have a second cash ISA, as you aren't allowed more than one ISA anyway (although some banks say you can, you can't). So I have another savings account that is open, I can take money out and put money in whenever I want but it just has a slightly higher interest rate than a normal current account and I have this on the side to put in extra savings, including left over money at the end of the month. Having another savings account for me, gives me more momentum to save as much as I can.
Save money leftover at the end of the month - Now for me, as I save quite a lot and have several outgoings, having money left over at the end of the month is a rare occasion but even if it's £20 I instantly move that into my other savings account as that money will add up over the months and it may come in so handy especially on a rainy day.
Budget, budget, budget - If you're on a salary like myself, you know how much you get paid every month and you can then figure out what money you have left once all of your outgoings have been paid, which allows you to budget. For me, I always budget so I know what I can and can't spend each month and it allows me to somewhat have control over what i'm doing, and if my budget doesn't allow it then I don't do it. I will say that budgeting can be hard, but once you've gotten into the groove of it, it is actually really easy and if it means you go for the cheaper dish on the menu, then so be it.
Reduce your outgoings - For the majority of people my age, the main outgoings you will have is a phone bill, gym membership and possibly car finance/insurance. Now I know reducing your outgoings often isn't the easiest, but i'm sure if you look through your bank statement there is something you can reduce or change. Whether it be a neglected gym membership or skipping on that takeaway coffee every morning or saying no to a dominoes, even if they do text you the most irresistible deal every single Friday when the clock strike 5. You can do it!
Make saving a priority - Saving is hard, we can all agree on that but if you dedicate yourself to saving you will honestly thank yourself in the long run. The tips above should definitely get you on the journey to saving, and it's amazing to see what you can achieve although it can be darn hard!
So those are some tips that i've learnt over the past year of saving and I really do hope that it has helped at least one of you out there, as you really don't learn any of this in school and often some people don't have the support of parents to learn from.
How do you save money? Any more tips that i've missed, i'd love to know!